preliminary final report & june quarterly update - Leighton Holdings

invested in the offshore construction market in Leighton’s
targeted regions.
In April 2011, De Beers awarded a US$587 million 66-
month mining contract at the Debswana diamond mine in
Botswana to a joint venture featuring Leighton Africa
(60%), and local companies Basil Read (20%) and
Bothakga Burrow Botswana (20%).
Leighton Africa is focused on pursuing contract mining and
mine infrastructure opportunities in Botswana,
Mozambique, Namibia, Zambia and Tanzania.
Habtoor Leighton Group
The 45%-owned Habtoor Leighton Group (HLG) reported a
segment loss of $206 million, excluding impairment
charges of $287 million, for the year to 30 June 2011,
compared to the previous year’s segment loss of $36
million. Segment revenue for the financial year was $847
million, down 23% on the previous year’s $1.1 billion.
HLG’s work in hand was $1.8 billion as at 30 June 2011,
down 27% versus $2.4 billion for the previous year. At year
end, the carrying value of the investment in HLG was $475
million compared with $1.1 billion the previous year.
After a tough two year period, conditions in the Middle East
markets are showing some signs of recovery. Over that
time, HLG has made good progress in diversifying its
business - from being almost a pure Dubai-based builder to
one of the leading providers of transport and social
infrastructure across the region. This leaves HLG well
positioned to capitalise on renewed growth, particularly in
Qatar, Abu Dhabi and Saudi Arabia.
The remaining legacy projects in Qatar are approaching
completion. The Al Shaqab Equestrian Centre main works
are complete and handed over, and a preliminary account
has been submitted. The final component of the Doha City
Centre project should achieve completion in 2012.
Bidding activity remained high, and HLG currently has over
US$10 billion of live bids. The award of new projects is
gradually increasing, driven somewhat by a desire by
regional governments to provide new and improved
infrastructure for their citizens.
During the year, HLG won 10 contracts worth in total more
than US$1.2 billion. The bulk of this work was in Abu Dhabi
and includes the US$328 million Khalifa Port, the US$139
million Qusahwira Building and Services package, the
US$600 million Al Mafraq Hospital in joint venture with
Murray and Roberts, and the US$110 million Abu Dhabi
Islamic Bank headquarters. Both the Zayed University and
the landmark Capital Gate building project were completed
and successfully handed over to the clients.
In Dubai, work on the US$2.4 billion Dubai Pearl project
proceeded according to schedule. The pace of work is
relatively subdued as the client works to finalise design,
financing and leasing arrangements for this massive
development. Two new projects were won in the Emirate
during the year, the US$199 million Daman Buildings in
Dubai’s financial centre, and the US$130 million Jewel of
the Creek development.
highest level of certification so it can bid unrestricted in the
Kingdom. It is currently project managing its first project in
the Kingdom, the ITCC building, and is bidding a range of
new opportunities, including a bauxite mine.
HLG continues to bid for work in other selected countries,
and is currently targeting projects in Kuwait and Oman.
Leighton Properties
Leighton Properties recorded a segment loss of $100
million for the financial year to June 2011 versus a loss of
$73 million in the previous financial year. This represents
final project writedowns on non-core assets. Excluding the
Green Square development in Sydney, Leighton
Properties’ total portfolio has an approximate end value of
$1.8 billion over the next five years.
The business is focussed on delivery of its existing pipeline
and securing new projects in the Commercial and Mixed
Use/Residential sectors of the market which are expected
to be strong growth areas in the medium term. Good
progress was made on identifying new opportunities that fit
within this strategy.
The Hamilton Harbour Residential Towers 1 and 2,
comprising of over 470 apartments, are more than 90%
sold. The project was unaffected by the flooding of the
Brisbane River earlier in the year and is on target for
practical completion in November 2011. A third tower,
Riverside Hamilton, is due to start construction later in
2011 and is currently more than 50% pre-sold. This mixed
use/residential development is being undertaken in joint
venture with Devine and is now consolidated following the
gaining of control of Devine.
In the commercial sector, a proposed 45,000 square metre
development at 567 Collins Street, Melbourne, upgraded
its sustainability design and is now targeting a 6 Star Green
Star Office Design rating. In New South Wales, anchor
tenants were secured for the A-grade Eclipse Tower at
Parramatta and the project is over 80% leased.
Construction commenced in December 2010 and the 20-
storey development is targeting a 5 Star Green Star Office
Design v2 rating.
The HQ North Tower in Brisbane is 100% leased and
recently won the 2011 National Development of the Year
award from the Urban Taskforce. It was also awarded a Six
Star Green Star as Built v2 rating which complements its
already awarded Six Star Green Star Office Design rating.
It is the largest building in Australia to receive this award
which represents 'World Leadership' in environmentally
sustainable design and construction. This project was
undertaken in joint venture with Leighton Contractors and
the sale of the North Tower is expected to occur in the
forthcoming year.
Leighton Properties has been selected as the preferred
proponent for two major urban redevelopments in
Queensland. The Ipswich Town Centre gained momentum
with the launch of plans for the sale and redevelopment of
the CBD regional shopping centre as part of the $1 billion
Ipswich City Heart precinct. Leighton Properties was also
selected by the Queensland Government as the preferred
developer of the Boggo Road mixed use precinct in
Brisbane.
During the year, HLG received a licence to operate in
Saudi Arabia and is currently working to achieve the
Leighton Holdings Limited JUNE 2011 QUARTERLY UPDATE Page 38